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Recent Drop in Gold Is Testing Critical Support

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The next sizable leg for this precious metal should be obvious very soon.

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The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today's Highlight: Tuesday's extended drop in gold doubled down on Monday's attack on Friday's lows. Tuesday's selling actually probed a fresh low. The next sizable leg should be obvious very soon.

Dollar Basket
Sep Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Tuesday ranged around 81.65 support, suggesting that sellers aren't gaining traction, but also that a bottom has not yet formed.

Eurodollar
Sep Contract EC; (NYSEARCA:FXE)
Tuesday's bounce that only attacked 1.3333 confirms that recent highs will need a little more testing as resistance before a downleg can trigger.

Gold
Oct Contract GC; (NYSEARCA:GLD)
Monday's drop extended down into and out of Tuesday's open, probing under Monday morning's 1282.30 low. Serving as a retest of the prior low could still form a durable bottom that launches a recovery, and that recovery would now be signaled as early as 1297.50. But there is also no further room to absorb selling pressure without it extending into a much deeper downleg.

Silver
Sep Contract SI; (NYSEARCA:SLV)
Tuesday afternoon's narrow ranging under 19.65 doesn't so much undermine Monday having held it, since its probe did not trend down. But there should be no room for absorbing further selling pressure, so a recovery should be obvious soon after Wednesday's open if a new downleg is to be avoided.

30-year Treasury
Sep Contract US; (NYSEARCA:TLT)
Monday's pullback was neither recovered nor extended Tuesday, as a retest of last week's lows down to 131-06 remains the likely next objective.

Crude Oil
Sep Contract CL; (NYSEARCA:USO)
Recovering Friday and Monday's probes under 106.50 and 106.00 did not trigger upside momentum that could avoid extending the pullback. Tuesday's fresh lows tested 104.85, natural support that fills the gap back to last Wednesday's close. But the decline is targeting 93.55-93.60 so long as 106.00-106.50 is not recovered.

Natural Gas
Sep Contract CL; (NYSEARCA:UNG, UNL)
Ranging narrowly sideways at the lows does not necessarily mean the decline is losing momentum.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
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No positions in stocks mentioned.
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